US inflation hit 3.8% YoY in April 2026 — the highest since May 2023 — while producer prices surged 6.0% YoY
April's CPI print broke from the disinflation trend on energy pass-through; PPI ran hotter still. The 2.2-point pipeline gap is the widest since 2022 — and points to more pressure ahead.
Headline CPI rose 0.7% in April and 3.8% year over year, the largest monthly print since June 2022. Gasoline alone accounted for over half of the monthly increase, running at an 89% annualized pace; core CPI held near 4.6%. The acceleration is concentrated in energy — not a broad reacceleration across the basket.
April's CPI acceleration was driven by gasoline at an 89% annualized pace
Producer prices ran hotter still. PPI for final demand surged 0.9% in April and 6.0% YoY, the highest YoY since May 2023. The PPI-CPI gap widened to 2.2 percentage points — the broadest since the 2022 episode and historically a leading signal of consumer-side pass-through over the next two quarters.
For the Fed, the print complicates the cut path that markets had begun to take for granted. If PPI goods stay near 6% while shelter holds above 4%, the composition of inflation in H2 looks both unambiguous and unambiguously sticky.
PPI services categories cover only a subset of consumer services and lag in periods of rapid composition change. The PPI-to-CPI pass-through estimate could shift if non-traded services pricing drifts away from the PPI proxy.
The decomposition treats US prices as a closed system. Geopolitical supply shocks (Red Sea routing, tariff regime changes, energy embargos) would reset the energy trajectory and are not captured by the trend-extrapolation here.
Methodology & sources
YoY changes computed as same-month one-year prior pct change on monthly NSA series. Hypothesis tests use 3-month annualised rates over a 24-month window. See “How we built this” on each chart for series IDs and transform recipes.